ESRD PPS rate slightly increases, focus on quality through 2021

The proposed calendar year (CY) 2018 end-stage rental disease (ESRD) prospective payment system (PPS) base payment rate is $233.31, an increase of $1.76 over the current base rate. CMS’ advance release of the ESRD PPS Proposed rule, scheduled to publish in the Federal Register on July 5, 2017, establishes this same payment rate for beneficiaries with acute kidney injury (AKI) receiving dialysis treatment. Other major changes include adjustments to the ESRD quality incentive program (QIP). The agency estimates that Medicare spending for ESRD facilities in CY 2018 will be approximately $10 billion.

PPS. The updated PPS base rate reflects a reduced market basket increase of 0.7 percent and the application of the wage index adjustment factor. The wage index floor remains unchanged for CY 2018. The fixed dollar loss (FDL) amounts for all adult patients (the dollar amount by which the costs of a case must exceed payments in order to qualify for outlier payments) will increase from $82.92 to $83.12 while decreasing for pediatric patients from $68.49 to $49.55. The Medicare allowable payment (MAP) amounts will decrease by four cents for pediatric beneficiaries to $38.25, and decrease from $45.00 to $42.70.

Drug pricing and AKI. The rule proposes to change the ESRD PPS outlier policy for drug and biologic payments to allow the use of any pricing methodology available under Soc. Sec. Act sec. 1847A to determine the cost for eligible items. This policy would allow outlier payments to be computed when average sales price data (ASP) is not available by using, for example, the whole sale acquisition cost or the average manufacturer price. In addition, the rule proposes updating the AKI payment rate to match the ESRD base rate.

ESRD QIP. Several changes are proposed for the QIP, including changes for payment years (PY) 2019-2021. CMS plans to shorten and simplify the performance score certificate (PSC) in response to feedback about the complexity of the document beginning in PY 2019 in an effort to make the document easier to understand. The QIP for PY 2021 is a major area of focus in the proposed rule, with considerable discussion of the possibility of accounting for social risk factors on quality measures. The agency seeks stakeholder input on the issue, and is considering the balance of improving beneficiary outcomes, fairly assessing the quality of care furnished by facilities, and avoiding the possibility that holding facilities to different standards for patient outcomes based on demographic would mask potential disparities or minimize incentives to improve outcomes for disadvantaged populations. The National Quality Forum (NQF) is currently conducting a trial period during which social risk factors are included in the risk-adjustment approach for certain quality measures.

The agency expects that, as a result of all proposed changes for CY 2018, freestanding facilities would see a 0.8 percent increase in payments and hospital-based facilities would receive a 1.0 percent increase. The effects of the PY 2021 ESRD QIP changes as a result of a facility’s performance are estimated to cause a payment reduction in PY 2021 for about 40 percent of dialysis facilities, with about 1 percent of facilities receiving the maximum 2 percent reduction. The total reduction is expected to amount to $29 million.

Extraordinary circumstances. The agency also proposes updating the extraordinary circumstances exception (ECE) policy, which allows facilities to request an exception to program reporting, for the ESRD QIP to better align with other quality reporting programs. Facilities would be able to submit a form signed by the facility’s CEO or designated personnel, the reasons for an ECE would be expanded to include an unresolved issue with a CMS data system, and a facility would not need to be closed in order to request and receive consideration for an ECE. An open facility would need to demonstrate that normal operations were significantly affected by a circumstance beyond the facility’s control. CMS intends to notify the facility of the decision within 90 days of receiving the ECE request.

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